Oil prices rose a fourth day on Friday on hopes for more stimulus from the U.S. Federal Reserve after data showed U.S. economic growth slowed in the second quarter as expected.

Dollar-denominated crude futures saw choppy trading as the euro and dollar also seesawed, buffeted by comments from European leaders.

The euro strengthened French leader Francois Hollande and his German counterpart, Angela Merkel, said they are determined to do all they can to safeguard the single currency.

The euro later pared gains after hitting a session high on a report European Central Bank President Mario Draghi would favor giving the bailout fund a banking license and would meet with German's Bundesbank President Jens Weidmann.

"Financial markets see a benign mix of gently rising risk appetite as worries over an imminent euro zone disaster ease and prospects for another U.S. stimulus increase," said Carsten Fritsch, oil analyst at Commerzbank in Frankfurt.

Brent September crude rose $1.21 to settle at $106.47 a barrel, posting a 36-cent loss for the week after four straight weekly gains. The premium to October Brent  stayed above $1 a barrel.

U.S. September crude gained 74 cents to settle at $90.13 a barrel, ending with a 1.43 percent weekly loss after gaining the previous two weeks.

But both contracts stayed on track to register healthy monthly gains next week, after both Brent and U.S. crude suffered double-digit tumbles in the second quarter.

Total Brent crude trading volume lagged the 30-day average by 33 percent, while U.S. turnover trailed its 30-day average by 29 percent, with post-settlement trading still underway.

SHOW ME THE STIMULUS

The euro's volatile trajectory on Friday followed Thursday's stock market and oil price rise after Draghi said the ECB was ready to do whatever it takes within its mandate to preserve the euro. 

Oil prices held gains after the Thomson Reuters/University of Michigan final reading showed U.S. consumer sentiment fell in July to its lowest level of the year.

Sputtering U.S. growth has encouraged some economists and market participants to expect that the Federal Reserve will act to provide more economic stimulus, a move that would probably weaken the dollar.

U.S. economic growth slowed as expected in the second quarter, expanding at an annual rate of 1.5 percent, leaving open the door for the Federal Reserve to decide if additional stimulus is needed.

"The 1.5 percent reading may make somewhat more difficult for the Federal Reserve to embark on additional easing, but does not preclude it in the least," said John Kilduff, partner at Again Capital LLC in New York.

"The prospect for easing will be supportive for crude oil, other commodities and equities," he added.

U.S. stocks advanced on the expectations for more central bank action, with the S&P 500 reaching the highest level since May 4, when equities fell sharply on disappointing U.S. April jobs numbers.

The Thomson Reuters-Jefferies CRB index, a commodity market bellwether containing 19 components, pushed up 0.73 percent.

MIDDLE EAST UNCERTAINTY PERSISTS

The violence and turmoil in Syria and tension between the West and Iran over the disputed Iranian nuclear program continue to fuel uncertainty in oil markets.

President Bashar al-Assad's forces renewed a ground and aerial bombardment of Aleppo on Friday, extending efforts to crush rebels in Syria's commercial capital.

Iran has allocated billions of dollars to self-insure its oil tankers, the semi-official Fars news agency reported on Friday, Tehran's latest effort to get oil to buyers through the financing obstacles of Western sanctions.

In addition to an embargo on purchasing Iranian oil, the European Union on July 1 imposed a ban on insurance for tankers carrying Iranian oil.

Iranian tensions and expectations that central banks will continue to print money caused analysts in a monthly Reuters poll to project higher average prices for Brent and U.S. crude for 2013.